Paper as a commodity has seen an increased growth in India driven by two key factors. First, the government’s ban on one-time use plastic, and second the rise of quick commerce and e-commerce where paper bags and boxes are in big demand. This is a major trend that has driven the recycled paper market in the country, providing a great opportunity for India's recovered fibre industry to grow. 

Wastepaper recycling and recovered fibre is really significant for a country like India, as it stands at the intersection of climate change, eco-conservation and resource sustainability. While India generates around 4.5 million tons of paper waste annually, according to wastepaper recycler The Kabadiwala, but the recovery rate of fibre from wastepaper is just at 30% annually, which means that a large volume of the wastepaper goes to landfills. However, current consumer market trend for paper bags and boxes means there is more demand for recovered fibre than there is supply. According to a paper by the peer-reviewed International Journal of Multidisciplinary Research while India is one the fastest growing countries when it comes to demand for paper, it constitutes a meagre 3 to 4 percent of the global demand for paper. 

Trends in the recovered fibre market

Due to a strong demand in the domestic market, the overall paper market continues to grow. In case of recovered fibre, packaging, boxes and bags continue to drive the demand. Industry reports claim that the market for packaging segment is a major driver, with the market reaching an estimated USD 19.07 billion as of August 2025. The consumption is further expected to increase in the next 

The Indian pulp and paper industry is one of the fastest growing industries with paper consumption increasing almost on a regular basis. By 2026 – 2027 the market is expected to be 30 million tonnes per annum, showing a growth of 30% annually over the last five years. According to a research paper done by the Centre for Science & Environment (CSE) published in 2023, around 76% of the production of paper is from recovered fibre from recycled paper. “This is highly environment friendly and supports in conserving natural resources, however the report also found that a major part of wastepaper gets diverted to different secondary applications and thus reduces the availability of the same to the paper industries for which it acts as a raw material, this also increases the import of wastepaper into the industry. As per CSE’s analysis, about 9 million tonnes of wastepaper is diverted in secondary applications. That is about 43 per cent of the total domestic consumption of paper,” explained Shobhit Srivastava Deputy Programme Manager Industrial Pollution Team, CSE in the report. 

Supporting the statement made in the CSE report, Rohit Pandit, General Secretary Indian Paper Manufacturers Association said, “India produced around 23 million tonnes of paper in 2024-25. Of the total paper produced in the country, already around 75% is from recovered paper / recycled fibre. Despite this, India continues to be a fibre deficient country. Inadequate raw material availability domestically is a major constraint for the Paper Industry in the country.” 

The market shows that recovery rate of wastepaper fibre is around 57% which is not adequate to meet the demand for recovered fibre in the country currently.  “To meet the need for raw material of domestic paper mills based on recovered paper, India imports about 7 million tonnes of recovered paper per annum,” added Pandit. The data from World Bank’s World Integrated Trade Solution shows that “India imports of waste and scrap of paper or paperboard, was around USD 854,109.93K and quantity of 4,814,950,000 Kg.”

Challenges the industry is facing

Despite the demand, the recovered fibre industry in the country is plagued by several significant challenges such as supply chain inefficiencies, low domestic recovery rate, technological limitations and reliance on imports. According to Hrishikesh Vora, CEO, Adler LLP, the global economic scene has led to a low demand for recovered fibre in the country. Even as the number of paper mills have grown in the country, they are going for different fibre blends to produce – this is dependent on the availability and supply of certain grade in recovered fibre – with many trying out cocktails of blends for paper production, he stated. 

According to the major players in the paper recycling industry, the high level of reliance on imported recovered fibre exposes the Indian paper industry to global supply chain disruptions, fluctuating international prices, and geopolitical factors like shipping route issues and varying import regulations across countries.

In terms of domestic wastepaper recovery, as warranted, informal collection sector is more dominant. The collection and sorting of wastepaper is largely handled by an extensive, unorganized informal sector. While providing employment, this system often results in inconsistencies in supply, poor sorting quality, and high contamination levels of the collected fibre, making it less suitable for high-quality paper production.

Added to this is the lack of standardization, as there is no uniform national mechanism for classifying wastepaper grades, with testing methods and quality expectations varying from mill to mill. This lack of uniformity across the industry creates inefficiencies and disputes over quality and rejection criteria. “The industry faces challenges with certain regulatory hurdles, such as a basic customs duty on imported wastepaper. Lack of strong mandates, targeted incentives for domestic recycling, and weak enforcement of existing waste management rules contribute to the industry's fragmentation,” explained Pandit.

The way forward 

Talking about the way to improve recovered fibre market in the country, Ravendra Veer Singh, Founder of PaperTio said, “The paper industry in India must decide how to import paper and improve its domestic collection and recycling of wastepaper. By developing improved systems for wastepaper collection and wastepaper recycling in India, the paper industry will evolve sustainably and be less susceptible to global market fluctuations.” PaperTio is an AI-driven B2B paper procurement platform that helps the paper and packaging industry to find, simplify, and streamline their raw material procurement.

Experts agree that one the best ways to improve the state is to create more public awareness about paper collection and segregation. They say that the lack of public awareness and effective reverse logistics are major hinderance in the collection of post-consumer waste. “Improved segregation at the source is crucial to obtaining higher quality, less contaminated recovered fibre,” adds Singh. 

Some believe that improving India’s wastepaper recycling rate can be accelerated through advanced sorting technologies like AI-powered optical sorters and automated waste segregation systems. Integrating these with decentralized collection networks and digital traceability can enhance quality and supply chain efficiency, fostering a more resilient paper industry.

As per CSE’s Srivastava, the industry requires a well-designed and aggressive system for collection, sorting, grading and utilization of recyclable wastepaper. “This is the only way to contain imports and cut the increasing cost of raw materials for the industries. A sustainable model must be developed so that most of the collected paper can be channelized to the paper industry,” he stated. 

Adding to this view, IPMA’s Pandit stated, “Continuous infusion of fresh / virgin fibre from wood and agro-residue is also essential to maintain the renewable cycle, as with each paper cycle the quality of recycled fibre deteriorates till it cannot be used again. IPMA has been continuously advocating to the Government that it needs to work on involvement of all stakeholders so that the recovery rate of post-consumer recovered paper goes up in the country through source segregation, effective collection and utilisation of recovered paper. With increase in the recovery rate, dependence on imports will decrease.” 

Some of the recommendations for the paper recycling industry include development of Extended Producer Responsibility (EPR) guidelines for wastepaper management, implementation of an integrated system for wastepaper recycling including formal and informal sector, exemption in GST rates for industries meeting the targets for wastepaper recovery, introduction of quality standards for recovered fibres, and instituting the  pulp and paper sector under the green credit programme.